Why did my insurance company only send part of the money?
Many roof claims are paid in two checks. The first check is the actual cash value: the replacement cost minus your deductible and depreciation. The second check, for recoverable depreciation, is usually released after the work is completed. If your policy has non-recoverable depreciation, there may not be a second check.
Replacement cost value and actual cash value
The adjuster writes an estimate for the replacement cost value, or RCV, which is the cost to replace your roof today. The insurance company then subtracts your deductible and depreciation, which is based on the age of the roof. The amount left is the actual cash value, or ACV, and it is usually the first check you receive.
The second check
On a replacement cost policy, depreciation is usually recoverable. Once the roof is installed and the final invoice is sent to the insurance company, the depreciation is released as a second check.
Non-recoverable depreciation
Some policies have non-recoverable depreciation on the roof. On those policies the depreciation is not paid back after the work is done. Check your policy declarations page or ask your insurance agent so you know what to expect before work begins.
Supplements
Sometimes additional repairs are found once work begins, or items are left off the first estimate. These can be submitted to the insurance company as supplements. MD Roofing documents supplements during the project and writes estimates in Xactimate, the format insurance companies prefer.
Related Questions
Can I keep the first check and not replace the roof?
It depends on your policy. You may give up the recoverable depreciation, so read your policy or ask your insurance agent before deciding.
How long does the second check take?
It depends on your insurance company. The second check is usually released after the final invoice is submitted.
